TY - JOUR
T1 - Poverty Traps With Local Allocation Tax Grants In Japan
AU - Doi, Takero
N1 - Funding Information:
This paper is based on an invited lecture that was given at the Spring Meeting of the Japanese Economic Association held at Kyoto University on 7 June 2009. Financial support from Grant-in-Aid for Scientific Research (No.19730224) and the Keio/Kyoto University Joint Global COE Program, “Raising Market Quality: Integrated Design of Market Infrastructure”, are gratefully acknowledged. The valuable comments of two anonymous referees are greatly appreciated. All errors are, of course, my own.
PY - 2010/12
Y1 - 2010/12
N2 - This essay investigates poverty traps related to Local Allocation Tax (LAT) grants in Japan. LAT grants, which are transfers of funds from the central government to local governments, make efforts for enhancing regional economic growth, due to the calculation of the LAT grants. Using a simple dynamic model, we show that LAT grants lower regional income and are a disincentive to localities to increase their estimated tax revenue. Using panel Granger (non-)causality tests, we find empirical support for asserting that there are poverty traps due to the LAT grants in Japan.
AB - This essay investigates poverty traps related to Local Allocation Tax (LAT) grants in Japan. LAT grants, which are transfers of funds from the central government to local governments, make efforts for enhancing regional economic growth, due to the calculation of the LAT grants. Using a simple dynamic model, we show that LAT grants lower regional income and are a disincentive to localities to increase their estimated tax revenue. Using panel Granger (non-)causality tests, we find empirical support for asserting that there are poverty traps due to the LAT grants in Japan.
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U2 - 10.1111/j.1468-5876.2010.00519.x
DO - 10.1111/j.1468-5876.2010.00519.x
M3 - Article
AN - SCOPUS:78649498218
VL - 61
SP - 466
EP - 487
JO - Japanese Economic Review
JF - Japanese Economic Review
SN - 1352-4739
IS - 4
ER -
